The Chainlink (LINK) price broke down from an ascending wedge and is likely headed towards the support area at $2.30.
ChainLink (LINK) is a decentralized oracle network that is built on Ethereum which aims to solve the problem of interoperability through a decentralized oracle network. Its design allows it to connect data sources that are found off-chain to on-chain smart contracts. It works best with bank payments, APIs and data feeds.
Cryptocurrency analyst and trader @scottmelker alluded to his previous prediction of the wedge breakdown — suggesting that it was the bearish divergence that initiated it.
The ascending wedge has broken down. The idea of the ascending triangle (which I said was not there) is clearly invalidated. I had to block a few rude people over this chart, so much emotion tied to this coin. This is an unbiased view. pic.twitter.com/4PIaHHqaM4
— The Wolf Of All Streets (@scottmelker) November 19, 2019
Let’s take a closer look at the Chainlink price movement and see if LINK will eventually initiate a reversal.
Chainlink’s Wedge Breakdown
The Chainlink price began trading inside an ascending wedge on October 9. After reaching a high of $3.21 on November 14, it began the current downward move which caused it to break down from the wedge. However, the breakdown occurred with low volume, signaling that it does not have a lot of strength.
The closest support areas are found at $2.30 and $2.00.
Incorporating the daily moving averages (MA) suggests that we are in an uptrend.
The Chainlink price has currently found support above the 50-day MA, which has previously made a bullish cross with the 100-day one.
Due to the low volume on the breakdown and the 50-day MA support, it is possible that the LINK price increases in order to validate the previous support line before continuing its downward move towards the support areas.
To conclude, the LINK price has likely begun a correction — which, judging by the length of the wedge, should take around one month to be completed.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
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